The primary reason to use the data room is to conduct due diligence in M&A transactions, fundraising or any other transaction that requires the sharing of sensitive information. They offer a safe alternative to email or free file-sharing services, and offer specific permissions and security features like encryption, two-factor authentication and watermarks.
The amount of information required for due diligence will differ depending on the scope and complexity, however it is essential that all parties are able to access the same documents. A central data room that has an organized folder structure and standard titles for documents and an index master makes it easy for those involved in the process and other parties to navigate and find information. The organization of documents into subfolders that are similar will also speed up the review process.
It is crucial to highlight the KPIs that are relevant and not overcrowd slides with irrelevant information. It is also crucial to not share non-standard analysis that can cause confusion for investors and alter their expectations of the company’s growth and health.
Include a summary slide on each deck to highlight the primary aspects and conclusions you want your audience to take from the presentation. It helps an investor to switch between more in-depth analysis of the numbers and the broader picture.
